Option Premium
Option premium is the price of an option contract. The premium is paid by the option holder to the option writer and is non-refundable whether the option is exercised.
Example: A call option with a strike of 100 carries a premium of 3 per share; for a standard 100-share contract, the total premium is 300. If the underlying trades at 105, the option has intrinsic value of 5 per share, while the remaining 2 per share may be attributed to time value.
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